• Alan Campbell, Senior Director & General Manager, UK&I at Nutanix


• 16.06.2022 10:45 am
#cloud #Financial #Services

Enterprises everywhere have been striving to migrate essential workloads over to the cloud in order to reap a number of dividends. These include greater agility in the face of heightened competition, the need to support today’s more flexible working patterns, and a desire to reduce the overhead of expensive in-house compute facilities. Cloud is also central to the desire of many organisations to transform operations in readiness for the digital economy of the future. 

It has been a somewhat different story in the financial services sector. Whilst many institutions fully accept that there are benefits to be enjoyed from a move to the cloud, many have been held back from taking a wholesale plunge in that direction. Some have been inhibited by their substantial existing investments in legacy IT, others by the highly regulated nature of the industry which dictates how data must be handled. The complexity of managing multiple cloud endpoints has also been a deterrent.

It hasn’t helped that tentative forays by institutions onto public cloud platforms have not always had the desired results. By moving just a handful of non-essential functions onto a single platform, they hoped they were taking the first steps to a one-stop solution to their challenges. But too often they ended up with scarcely measurable benefits for their troubles. Some will not even have progressed this far, having noted one or other of the high-profile public cloud data breaches that have hit the headlines in recent years and decided to put caution first. In consequence, many have opted to retreat back to the ‘devil you know’ option of on-premise IT.

All of this helps to explain the findings of the latest Nutanix global Enterprise Cloud Index (ECI) survey and research report, which measures enterprise progress with cloud adoption. It found that financial services organisations trail the global average, taken across all sectors, by 10%. 

Playing catch up

The survey also found evidence that while early moves to place workloads onto a single public cloud platform failed to deliver the goods, the more nuanced and blended approach of hybrid multicloud is reawakening enthusiasm for cloud migration. 

Adoption of a mix of private and public cloud models, perhaps involving the use of multiple public cloud platforms chosen for suitability for particular applications, appears to be striking a chord. The survey predicts that this hybridised approach will double in popularity in the financial sector from 26% today to 56% within three years, in line with a wider global trend of evolving to multicloud. Institutions are turning up late to the cloud party, but are now determined to catch up and succeed. 

Not without challenge

This doesn’t mean that banks and insurers are expecting everything to be plain sailing. That old cloud bugbear of security has not gone away, with 50% of respondents citing security concerns as a challenge to multicloud adoption. Top financial services IT priorities for the next 12 to 18 months include improving security posture. When asked what their organisations had done differently because of the pandemic, 70% mentioned increased security spending, and a move to multicloud is likely to further fortify this resolve.

The complexity of operating across cloud borders remains a major challenge for financial services organisations, with 84% of respondents agreeing that success requires simpler management tools. Integrating data across clouds was an issue for 46% of those questioned, with performance challenges with network overlays affecting 43%. Given that nearly 78% said they lacked key IT skills to meet current business demands, simplifying operations is also likely to be a key cloud priority in the year ahead.

Some 47% said they are investing in developing and implementing cloud-native technologies, while 64% have spent more on increasing AI-based self-service automation, and the same percentage on infrastructure upgrades, both with a view to facilitating multicloud.

Application mobility is also top of mind. A large majority (83%) of our respondents agreed that moving applications to a new environment can be time-consuming and costly, so it’s no surprise that the adoption of containers will rise in step with multicloud deployments. Among financial services respondents, 86% said that containers will be important to their organisations within the next year, reflecting evolved cloud priorities. 

A hybrid multi-cloud future

All in all, some 82% of those asked said they believed that the hybrid multicloud model, one that involves the use of multiple clouds both private and public, with seamless interoperability between all of them, is the best way to face up to issues ranging from security and operational resiliency to manageability and data integration. They have faith that this will address some of the key challenges of multicloud deployment by providing a unified cloud environment on which security and data governance policies can be applied uniformly. While financial institutions don’t believe there is a one-size-fits-all approach to cloud, they are happy that a hybrid multicloud approach can be made to work for them.

Having achieved this insight, their next step has to be seeking out hybrid multicloud solutions with integrated manageability and security, solutions that offer the ability to quickly move apps among cloud infrastructures cost-effectively. If they can do this, then they will have moved on successfully from their early difficulties with cloud and perhaps even find themselves ahead of the mainstream rather than playing catch up.